Topical items and views on the impact of digitisation on publishing and its content and the issues that make the news. This blog follows the report 'Brave New World',
(http://www.ewidgetsonline.com/vcil/bravenewworld.html ), published by the Booksellers Association of the UK and Ireland and authored by Martyn Daniels. The views and comments expressed are those of the author.

Friday, February 19, 2010

Digital Pricing: Be Careful What You Wish For

The agency pricing model shifts the pricing control back upstream to the publisher who can now play digital retail from behind their desk. But is this a real or just a hollow victory? Hachette Book Group, HarperCollins Publishers, Macmillan, the Penguin Group and Simon & Schuster have agreed agency terms under which they would set e-book prices and Apple would serve as an agent to sell the books to consumers. Apple would take 30% of each sale, leaving 70% for publishers to ‘share’ with authors.

The New York Times report that the Apple terms include a pricing formula that allows for a price reduction if it becomes a bestseller. Apple wants price flexibility for the hottest books, which are heavily discounted in the physical world and at rival retail sites. Apple also wants e-book prices to reflect cheaper hardcover prices where a publisher offers comparable hardcover editions at lower prices. Apple is merely acting as a reseller and there is nothing wrong with that.

So ebook pricing is variable and can be triggered not just by some age factor, but also by sales volume. However is the sales volume triggered through one channel or agent, or all channels and agents and the New York Times best-seller charts? Is the price to be applied universally or uniquely, locally or globally? So will the price to start at $15, $14 or $13? Is the price hike we were told was for the sustainability of the digital market the mere ceiling price point? If the hottest books ship cheaper, are publishers shooting themselves in the foot and giving away the winners, instead of playing them? How will this magic price change happen and who will control this morphing from 'also ran' to 'best seller' and potentially back again? will books at the edge of the charts see saw up and down like yo yos?

We now have an open market with tablets and mobiles appearing weekly. The ebook is only a fraction of their appeal and this technology driven roller coaster is about defining the ultimate media player. Just as we learnt Google was about selling advertising so we should look at others motives.

Multi media devices play; games, videos, TV, music, magazines, newspapers, are social network enablers and can also display books. Its about capturing eyeballs to capture the dollar. Books not only have compete on access and availability, but on time and spend. Apple are already moving the TV and video goalposts on price downwards and price will be a very important element that decides spend and ultimately success.

The ebook will sit and compete with many others and if it holds up everyone wins, but if it doesn’t then prices will be realigned and the people who will do that are the ones closest to the street, or with clear vested interest, not those sitting behind desks.

1 comment:

Just an exercise in wishful profit thinking. Readers will consider anything over $9.99 as being overpriced and not worth the money. Most authors would prefer their books be read, and since 95% are mostly unknown, I priced my book at $3.99. And last month I sold more Kindle books than paperbacks. Change is coming.

About Me

Before entering publishing I worked for many years as a Senior Executive in blue chip organisations in the retail, oil and automotive sectors. My publishing induction was initially as Director of Strategic Development at VISTA. There I was responsible for, and a contributor to, their highly acclaimed ‘Publishing in the 21st Century’ research series, the primary creator behind publishing services PubEasy and ‘batch.co.uk’, the initiator of the development of new Front Office systems to support publishers. In 2006 I joined Value Chain International(VCIL) initially as VP Marketing, Media and Publishing before becoming their President in 2009. In July 2011 the company's operations were acquired by Syncordia. I hold two non executive positions with publishing industry players Bibliophile Ltd and Haven Group and currently setting up Read Petite a service focused on providing digital short form material online via subscription.
Email mdaniels@opus57.co.uk